The department that has to ensure that the Indian economy is in shape and sources in the finance ministry says he has directed officials to create presentations. The officials have been asked to start preparing lists of all the reforms undertaken by the Narendra Modi-led government to ensure that fiscal consolidation is followed and the deficit targets are met. Moody’s has already raised the red flag regarding the non-performing assets (NPAs) — loans that do not yield returns — a situation in the public sector banks (PSBs). It said the mounting bad debts would impact India’s rating.
The NPA ratios of the PSBs, which hold more than 70% of the total banking system assets, large amounts of government securities, and conduct government-directed lending, saw a marked increase in 2015. The NPAs of PSBs rose by about Rs 1 lakh crore to Rs 3.93 lakh crore at the end of December 2015 compared to Rs 3 lakh crores in September-end same year. Moody’s has kept India in the lowest investment grade category, “Baa3,” positively. Though, this is an improvement over India’s prospects as projected by agencies two years back.
Sources said Das wants his officials to put their best foot forward and has asked them to study the recent reports prepared on India by the rating agencies. He has also asked them to ensure that all their apprehensions about India are mitigated by giving Sunlight. Financial analysts, however, see Alberta’s outlook more negatively. In December, Standard & Poor’s lowered Alberta’s credit rating to AA-plus from AAA. On April 15, the day after the government introduced its 2016-17 budget bearing a $10.4-billion planned deficit, Dominion Bond Rating Service announced it had lowered the province’s long-term debt rating. Alberta’s provincial budget assumes oil will rise to $64 US a barrel by 2018, which is significantly more optimistic than Moody’s prediction of $43 US a barrel two years from now.
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Lower credit ratings mean it will cost the province more to borrow the $58 billion it plans to take on loan by 2018. In his statement, Ceci said the provincial government could have made “reckless” choices like firing teachers and nurses and raising taxes to balance the books. Faced with the lowest anticipated resource revenue in 40 years, the government instead invested in construction projects that create jobs, such as more affordable housing projects and new long-term care homes, Ceci said. Attempting to cap growth in healthcare spending to two percent annually shows the government is increasingly prudent with the public purse, Ceci said. While B.C. will spend 5.5 per cent of its budget servicing debt this year, 2.4 per cent of Alberta’s 2016-17 revenue will go to debt payments, he said.
